The Hindu Business Line : Leather exports have breached $2-b mark: Council

This was confirmed by the Chairman of the Council for Leather Exports (CLE), Mr S.S. Kumar, who told Business Line in an interview that "there were strong indications that the $2-billion mark has been breached."

Mr Kumar said that feedback received from the Customs officials indicated that the strong export momentum witnessed between April and December 2003 has been maintained during the remaining months of the year too.

If this is borne out by the official figures (as and when they are published) it would mean that the leather sector has been able to reverse the declining trend of the earlier years. Exports dropped by 1.4 per cent and 6.3 per cent in 2001-02 and 2002-03 respectively, CLE sources said.

As per DGCIS figures, between April and December 2003 exports were valued at $1.5 billion (around Rs 6,540 crore) registering a growth of 5.4 per cent over the same period in 2002.

During the first nine months of 2003-04, exports had shown a small increase in rupee terms too, despite the appreciation of the Indian currency. Major importing countries showing a rise in offtake were Germany, Italy, France, Hong Kong, Spain, Denmark and Greece.

The engine of growth has been the leather footwear industry, which showed a 20 per cent growth between April and December 2003 period. "Full shoe exports from India have come to stay," the CLE chairman remarked.

Countries where Indian shoe exports made significant gains were Germany, Italy, Spain, Denmark, Greece, Switzerland, South Africa, Austria, Belgium, China and Indonesia. However footwear component exports like uppers continued their downward slide. Finished leather exports too were down.

Among the top eight export earners for India, the leather industry occupies a prominent place in the Indian economy with a substantial employment generation potential. Nearly 65 per cent of the industry's output is from the small and cottage sector.

The export basket comprises finished leather, leather footwear, leather components (shoe upper and soles mainly), leather garments, leather goods, (including saddlery, harness and leather gloves).

The industry is spread over eight States in the country with the three southern states - Tamil Nadu, Andhra Pradesh and Karnataka hosting some of the major production centres.

Explaining the slide in footwear components, Mr Kumar said that the continuing decline of footwear component export is due to declining offtake by European shoemakers particularly in Germany, UK, Spain and Portugal. "Many shoe manufacturing units in Europe had closed down due to high labour costs," he said.

Citing an example, Mr Kumar said that in Germany alone, only 10 per cent of the 220 footwear manufacturing units operating a couple of years ago has survived.

"This is the reason why CLE adopted its policy of encouraging component units to convert to full shoe manufacturing - if the technology and the raw material is good then the labour cost advantage can be leveraged very well," he said. In this context, he remarked that taken together with non-leather shoes, the footwear segment was one of the most dominant sectors in the world leather trade, accounting for over 50 per cent of total transaction. Brazil and India had a fair share of the market.

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